by Bill McBride on 3/25/2008 01:08:00 AM
Tuesday, March 25, 2008
From the WSJ: Foreclosure Rate Outpaces Sales by Lenders
Foreclosures are occurring at the highest rate in decades -- and as a result, lenders are acquiring homes faster than they can sell them off.With foreclosed properties accounting for 10% or more of the housing market, house prices will be under significant pressure all year.
Last year, sales of foreclosed homes rose just 4.4%, while the supply more than doubled, according to First American CoreLogic.
This year, sales of homes owned by lenders will likely total 480,000 properties, or 10% of all sales of previously occupied homes this year, [Mark Zandi, chief economist of Moody's Economy.com] estimates.
As far as the supply of foreclosed homes increasing, I checked the Countrywide site, and I was a little surprised to see Countrywide's REO inventory declining.
Click on graph for larger image.
This is a graph from the Countrywide Foreclosures Blog showing that Countrywide's REO inventory appears to be declining. Puzzling. Perhaps Countrywide is being more aggressive than other lenders because of the pending acquisition by BofA.
Also from the WSJ: Wave of Foreclosures Drives Prices Lower, Lures Buyers
A glut of foreclosed homes of historic proportions is starting to drive down U.S. home prices faster as lenders put more properties on the market and buyers show signs of interest.
The ability of America's lenders to manage this fire sale will be crucial to determining how long the housing market stays in the dumps -- and how quickly blighted neighborhoods can heal. The oversupply is severe: In some major markets, including Las Vegas and San Diego, foreclosure-related sales have accounted for more than 40% of all sales in recent months.
Posted by Bill McBride on 3/25/2008 01:08:00 AM